"You watch your tail, cowboy."
--Nick Conklin (Black Rain)
Peter Atwater thinks attention should focus on the sell-off in Japan and the associated spillover effects. Atwater suggests that the parabolic move in Japanese markets earlier this year reflected investor confidence in central bank ability to boost asset markets higher thru money printing. Once the last investor capable of becoming confident in central bank prowess does so, then the top in sentiment is in and the only place for confidence (and prices) to go is down.
He suspects that the harsh reversal in Japanese markets, both stocks and bonds, is a symbol that the top in central bank confidence has been put in. Because bubbles, he brilliantly observes, have a LIFO (last in first out) quality to them, the most extreme cases occur near the apex of confidence and are the first to turn. Because Japan has the makings of such an extreme case, market reversals there may signal that a systemic turn is now underway.
The Nikkei, btw, lost over 6% last night.
position in SPX, Treasuries
Subscribe to:
Post Comments (Atom)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
1 comment:
You have a row of dominoes set up, you knock over the first one, and what will happen to the last one is the certainty that it will go over very quickly. So you could have a beginning of a disintegration that would have the most profound influences.
~Dwight D Eisenhower, 1954
Post a Comment